Question of ethics

Q My firm has been invited to enter into a referral arrangement for personal injury claims with a claims management and loss recovery company.

The clients pay a percentage of their damages to the company in return for an indemnity for costs.

Can I do this?

A No.

Practice rule 9, see page 227 of the Guide to the Professional Conduct of Solicitors, 1999, eighth edition prohibits a solicitor from entering into an arrangement with a claims assessor to act for the claims assessor's clients on claims arising out of death or personal injury if the claim's assessor is remunerated on a contingency fee basis.

Q I have received several commission payments of less than 20 each for the same client.

Practice rule 10 seems to suggest that I am not required to account to my client for such commission.

Is this correct?

A It depends.

If the commissions arise from the same transaction, the payments should be treated in aggregate.

If the total is 20 or more then you may only retain the commissions if the requirements in practice rule 10 have been met, see page 283 of the guide.

Please note

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Question of ethics is compiled by the Law Society's professional ethics guidance team.

Send questions for publication to Austin O'Malley, the Law Society, Ipsley Court, Berrington Close, Redditch B98 0TD; DX 19114 Redditch; tel: 020 7242 1222.